Bacon's Rebellion

Medicaid: Pennies Wise, Pounds Foolish?

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by

James A. Bacon
in

The May edition of Virginia Business magazine opens its cover story, “The Medicaid Money Crunch”, with a telling anecdote: The Eastern Shore’s nonprofit Bay Aging organization supplies home-health aides to elderly people so they can live semi-independently at home rather than running up the tab in a nursing home. VB summarizes the organization’s predicament as follows:

Medicaid reimbursement for the home-health service is so low that the agency pays its aides only $7 an hour with no benefits. As a result, turn-over is rampant. In one recent year, 40 of 140 aides left Bay Aging. Without aides to tend to them, many aging clients are forced into the institutional setting of nursing homes–which Medicaid must reimburse at a much higher rate. “From a business point of view, why would you not be trying to fund the in-home services that are much less expensive?” asks Senior Vice President Velsey-Massey.

Could raising the reimbursement for home-health Medicaid services help the state save money? That depends on a number of things: (a) how much it would cost to pay the home-care aides more money; (b) the number of patients who, then, could stay at home rather than check into a nursing home; and (c) how much the state would save by having fewer patients in nursing homes. Virginia Business doesn’t provide those numbers, but it certainly seems to be worth investigating.

Virginia runs one of the fiscally tightest Medicaid programs in the country, but that doesn’t mean there aren’t opportunities to save money through sharper management. Given the inevitable aging of the population and escalating expenditures in future years, the state needs to explore every avenue possible to run its Medicaid program more efficiently.

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  1. El Equipo Progresivo Avatar
    El Equipo Progresivo

    Lowell Fulk made this one of his primary issues in 2003 and again this year.

    He has apparently done quite a bit of research on the issue. You might want to ask him if he can give some insight.

    Interesting to see a democrat wanting to save taxpayer money and provide better services at the same time.

  2. Will Vehrs Avatar
    Will Vehrs

    Jim, Virginia might be able to save money and provide better services if someone ever had the common sense to form ad hoc task forces between business assistance and social service/medical provider services.

    Every day Virginians, particularly in rural areas, call for information on starting home health care services businesses. They are given basic business formation information, licensing instructions, and Small Business Development Center referrals. Most undoubtably fail because it’s tough to get and keep help, especially when the business model isn’t well-formed.

    What if these home-health providers got the kind of gold-plated training the state gives to office supply vendors and consultants who want to do business with state and local governments?

    A combination of raising reimbursement rates and providing sound business training to the novices who start these businesses might do a lot of good, but somehow Virginia refuses to consider having one silo work with another to achieve a worthy goal.

    It stuns me that Virginia provides more help to the person selling staples to Accomac County than to the person caring for an Eastern Shore senior citizen.

  3. Paul Avatar
    Paul

    Yeah, this might save a BIT of money. I’m curious how it’s cheaper to provide home care though…

    I also wouldn’t want to see seniors forced into home care when they should really be in an institution. Quite often, families sell their older relative’s house and use that money to pay for continuing coverage nursing home.

  4. Ray Hyde Avatar
    Ray Hyde

    Will: I believe you are exactly right. I know little about home health care, but I have a farm the county claims it wants to preserve.

    I get zero help from them, unless you count my annual letter fro the Johnsongrass police.

    When my Mother-in-law was suffering from Alzheimers we concluded that 24 hour home care was not doable. You would need a minimum of three full-time employees. But for people in my mother’s condition, all she needs is a little help each day, plus someone to look in.

    There are dangers of course. My mother-in-law locked herself out of the house one night during an ice storm. Fortunately she had her car key (she thought it was time to go to church) and managed to get next door where we lived. A close feriend was not so fortunate with her mother in a similar circumstance.

    Paul: you are right also. For years I have advised anyone who would listen (and young enough to benefit) to invest in chains of assited living like Manor Care and Sunrise. Sooner or later they will own everything.

    Institutional care is not perfect either. We had major problems before we found an appropriate and caring place for my wife’s mom.

    Here is a horror story. Eventually Ethel needed to be transported to a hospital. The nursing home was across the border in Loudoun County. Loudoun rescue squad could only transprt her to Loudoun locations, even if we paid the difference. We tried to get a private service to transport her closer to home (we had previous bad service from Loudoun Hospital).

    No private service was available on weekends because EVERY service we called was under contract to provide emergency coverage for weekend sports events.

    Bizop anyone?

    Eventually the nursing home owner assisted us in transporting her in his own vehicle.

    How can a line on the map screw so many people over?

  5. Paul Avatar
    Paul

    Ha. My great-grandfather used to always tell me, “I’m saving up for a fancy retirement plan so when they put me in an old folks home, it’s a high rise. That way I can jump out the window.”

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